First of all, Mr. Perina, we know that Plzensky Prazdroj is one of the most famous breweries in Czech Republic, so could you tell us briefly about its historical background, concentrating more upon the last ten years following the revolution?
First, I have to say that our beer is not the best just in Czech Republic, but in the world, too. Names of many similar beers all around the world are based upon the name of our brand - all the Pills beers for example.
Considering the history, the beer brewing, as you know, has a very long tradition in the Czech Republic and in Plzen in particular. This history goes all the way back to 1295, but the most famous part begins in 1842 when the first Pilsner brewery was founded. The very interesting thing is, that its founders were also owners of a brewing trademark, which was given to them by the Emperor. It means that people who stood at the beginning of this brewery were the best and most qualified ones. The beer soon became the favourite one all around the Central Europe, and in 1913 Plzensky Prazdroj was the biggest brewery in Europe and the first one to produce 1 million of hectolitres. Then , of course, the history of the communism era isn't very interesting, basically we became the main beer supplier for then Soviet Union. Nonetheless, even then , we were still exporting into about 60 countries world wide. The new history begins in 1990, when during the first few years after the revolution the brewery was being reconstructed and every year the production was increasing by 20-30% up until the 1998 when we crossed the mark of 5 million hectolitres.
So whose decision was it, that South African Breweries should take Plzensky Prazdroj over?
Well, that's the history of 1999, the time when we started looking for a strategic partner to help us to expand. Even before we started looking, the main share holders of PP and Radegast made an agreement to create a group of a total production volume of 8.5 million hectolitres and this group will offer itself up for bidding. At that time , Nomura was the biggest share holder and it was them that organised the selection process of a strategic partner to sell 51% of shares to. About ten world breweries took part in the bidding - Heineken, Anhauser Bush etc. Basically all big European breweries. The selection process was finished in the late days of October 1999, and South African Brewery became the holder of those 51% of shares.
You mentioned the production number of 8.5 million hectolitres, so with SA Brewery joining, what are your new strategies and what are you planning to invest into so as to boost the production?
You probably know that SA Brewery is very active here in Eastern Europe, therefore as our strategic partner, they bring markets to us, where they are active themselves. Specifically Poland, where they hold about 35% of the market, and in Hungary and Slovakia with 25%. Obviously the new strategy is based on this. It means joining the forces in the countries where the position on the market and distribution channels are strong and add our products to their portfolio. For example in Slovakia we have began the production of some of the most favourite licensed products, such as Radegast and Gambrinus. So basically this is the strategy for the East, and considering the West our main markets are USA, Germany, UK and Spain. We are preparing some projects to find more distribution channels, increase the volume of export. Also, Plzensky Prazdroj is a better known name than that of SA Brewery , therefore the name becomes a part of that strategy as well.
By how much more do you have to increase the volume of production in order to fulfil your export objectives; it seems that you will be expanding into Africa as well.
Yes, maybe. The basic strategy is that the brand Pilsner Urquel will be produced only in Plzen, therefore if the production increases, the other brands will be produced under the license in other breweries outside Plzen, and the Plzen brewery will use its capacity of 5.5 million hectolitres to produce only Pilsner.
So you don't want to produce Pilsner Urquel outside the Czech Republic at all?
No, it must be always produced only in Plzen, because the name Pilsner Urquel is protected by appellation of origin.
So what about Gambrinus and Radegast? Are you planning to export more of these brands?
No, we will be exporting only Pilsner Urquel and Gambrinus and Radegast will be produced elsewhere under the licence. It means that we won't export the beer, but the know how, the knowledge of how to brew it.
To start exporting to the new markets and be successful, you have to penetrate them somehow. How are you going to do that?
As I mentioned before, our most important markets are USA, UK and Germany. In these countries we have our subsidiary companies with about 20 employees to take care of distribution and marketing. It was very difficult for us to increase the export, because we were spending all the money here in Czech Republic, but since we have a strategic partner now, we are able to invest into building up a new distribution system, marketing and so on.
To how many countries are you exporting at the moment?
Fifty five. But the four most important ones are USA and Germany, where we are starting this year and UK and Spain, where we'll start next year.
Back to the domestic market now, what is your market share in the Czech Republic?
It's about 44% at the moment. | And since you have a foreign partner now, will you be focusing more on the foreign markets or on the domestic one?
We really want to keep this share of the domestic market. It is very important for us. You see, there are around 50 breweries in Czech Republic, so the market here is very competitive. Therefore we want to keep the share of the market we now have, rather than increase it. We want to increase the export though. By that I mean the export of the actual product and giving licences to other breweries.
We know that Czech Republic is one of the top three countries when we talk about beer brewing, so of course the competition is very fierce. What would you, as a general manager, say is your main advantage and what makes you special in comparison with your competitors?
I think we have the very best portfolio of brands. The traditional Pilsner Urquel of course, but also Radegast, which is only 30 years old and very popular with young people, then Gambrinus, the most popular one of all, and a very successful Popovicky Kozel.
We have also been to Budweiser Budvar, what makes you different from them, thinking about the brewing process?
It is entirely different. Budweiser is much younger. They started 40 years ago with the same technology as Pilsner Urquel, but their process of fermentation is completely different, because the percentage of alcohol is higher than in Pilsner, it's around 5.5%. Our beer has around 4.2 - 4.3% of alcohol. It means, that the amount of alcohol, sweetness and bitterness in Pilsner is very balanced and the bitterness is twice as high as in Budweiser Budvar.
South African Brewery now holds 51% of shares, are there going to be any more changes in the structure of share holding?
SA brewery has been our strategic partner for a long time and I think that because of their relationship with Nomura, the number of shares they hold will increase maybe even up to 100%. It's only a question of time.
You wan a competition for the best internet website among the Czech companies. Is it part of your strategy to be more global and to reach new markets? Please elaborate.
Yes we wan the competition for the best internet presentation. Actually we are going to change it in April. Not the contents, but the layout, just to make it more modern.
Our readers are always interested in new business opportunities, in which part of your activities would you be interested to attract investments or make new agreements?
Now we are preparing a strategic plan for USA and Germany and that should be finished by the end of this year. Export to these countries is the most important thing to us.
How much are you going to export into US?
Last year, it was almost nothing, only 50 000 hectolitres. I think we can sell more, if we invest into the market. We have been working with distributors for 10 years and the priority is to sell the brand hard now. Last year the management decided to found an independent company there. Now there are about 30 of our people in New Jersey.
And Germany?
It's the same . We have a subsidiary company there as well, it has been independent for two years now and we are preparing ourselves. We need money, of course, but we have a partner now, so it's fine.
As a more personal issue now, we also came to interview you as a businessman, could you tell us briefly about your career and how did you get into this position?
It's quite simple. I am a brewmaster, I studied at a university of brewing (there are only two such universities in Europe, one in Munich and one in Prague). After finishing my studies, I began working as a brewmaster in a small brewery in Karlovy Vary. It was part of Pilsner Urquel brewery, because at that time PU brewery had six small ones around West Bohemia. Then I became a managing director of this small brewery and after the revolution, in 1992, I got into the position of a managing director of Pilsner Urquel.
And what has been your most satisfying personal achievement?
What I see as a biggest achievement is the merging of Radegast and Plzen. Because only such a strong group stands a chance to keep the reputation of Czech beer so good around the world. So my dream will come true at this year's general meeting, when the final fusion of these two into one subject will be agreed upon. It should happen sometime in August and then there will be only one Czech company Pilsner Urquel with a production capacity of over 8 million hectolitres.
Another question, where in Prague is the best pub to drink Plzen?
U Zlateho Tygra -it's excellent, and also U Rudolfina. actually there are so many!
As a final question, what would be your message to our readers?
Drink Plzen, because it's the mother of all beers. |
